Form signed, sealed -- but not delivered

A beneficiary-change form on a $250,000 life-insurance policy tears a family apart.

November 14, 2007|By Rene Stutzman, Sentinel Staff Writer

SANFORD -- To take care of his family, millionaire businessman John Alan Lokey bought a $250,000 life-insurance policy.

A problem arose, however. Two years before he died, he filled out a form changing who would get the benefits, but the insurance company never got the paperwork.

That has set off a legal battle, pitting one side of Lokey's family against the other.

"We had such a wonderful family," said Amy Ballurio, 48, Lokey's ex-wife, who stands to get either $125,000 or nothing -- depending on how the case is resolved -- "and this is tearing it apart."

The insurer in the middle is Banner Life Insurance Co. of Rockville, Md.

"Banner Life knows it's not their money, but they don't know who to pay it to," said the company's attorney, Robert Wilkins Jr. Banner has filed suit in Seminole Circuit Court, asking Circuit Judge James E.C. Perry to sort it out.

If the judge orders the company to pay the old beneficiaries, $125,000 would go to Lokey's nephew, Justin Hintz, 26, of Ocoee and $125,000 to Lokey's youngest daughter, Cammy Lokey, 19, of Longwood.

If the judge rules that the newly discovered beneficiary form is valid, however, Hintz would get nothing. Half the money would go to Ballurio, the ex-wife. The other half would be split evenly by Lokey and Ballurio's daughters, Cammy Lokey and Cortney Scribner, 22, of Lake Mary.

The dispute has split the family into two camps: ex-wife and her two daughters on one side, nephew on the other.

They had been friendly before, Hintz said. Not anymore.

"They quit talking to me," he said.

John Lokey, 49, died of heart disease May 29. He owned Records Management Systems, a small Sanford company that transfers paper records to CDs and microfilm.

His net worth, according to his divorce file, was $1.5 million in late 2004.

"He was so cool. He really was," said Hintz, who worked with him. Lokey, he said, had "the coolest toys."

They included an airplane, a Harley-Davidson motorcycle and a fishing boat. He lived at Spruce Creek Fly-in, the Volusia County airstrip community.

Lokey divorced his wife in 1996, and as part of their settlement, in 1999, bought the life-insurance policy now in dispute. He was supposed to name his former wife the "irrevocable beneficiary," but that never happened, according to court records. Instead, he named his two daughters.

Then, in 2004, his oldest daughter, Cortney, made him angry, according to family members: She ran off at age 18 and married a Marine and didn't invite her father to the wedding. So John Lokey took her name off the policy. Instead, he ordered Banner to pay her half of the benefits to Hintz, his nephew.

"He loved me," Hintz said.

The other half, John Lokey left alone. That $125,000 would still go to his younger daughter, Cammy.

That's the official change-of-beneficiary form on file at Banner. But seven months later, Lokey signed a new change-of-beneficiary form, the one recently discovered. The warring sides don't dispute that he signed it. There's a copy of it in the court file.

His secretary, Patricia Dooley, signed the form as a witness. She would not answer questions from the Orlando Sentinel.

"Somehow or other, it didn't get to Banner," Ballurio said.

No one is sure why.

Wilkins, Banner's attorney, said the insurer is not at fault. It didn't lose the form. It simply never received it, he said.

Hintz's attorney, Council Wooten Jr., alleges that John Lokey never sent it to Banner because he never meant for it to take effect.

Hintz has demanded his $125,000. Ballurio has demanded her $125,000. The two sides are far apart in settlement talks, they say.

Legal disputes over life-insurance benefits are not common, but when they do crop up, said Kacy Donlon, a Tampa lawyer, they often involve beneficiary forms.

Said Wilkins, Banner's attorney: "There's a lot of drama involved. When there's a lot of money, it's an important issue."

"It's difficult," Ballurio said. "You don't expect this to happen from someone you care for. I don't understand how families can do this to each other."